In a Lunar New Year greeting on the ministry's
homepage, Xie said that the external and internal conditions affecting China's
social and economic development in 2009 were "very severe" and more difficulties
had to be overcome to achieve "steady and relatively fast" economic growth.

Xie said government funds should be used efficiently
as the government carried out an active fiscal policy to support public
investment while cutting taxes.

To stimulate the economy, the government has raised export
tax rebates three times since July, increased farm subsidies and endedthe value-added
tax for equipment purchases -- a move that's expected to reduce companies'
tax bills by 120 billion yuan (about 17.4 billion U.S. dollars) a
year.

Moreover, the threshold for individual income tax,
which now stands at 2,000 yuan per month, is likely to rise.

Although 2008 fiscal revenue grew an estimated 19
percent from 2007 to some 6 trillion yuan, the economic slowdown, falling
corporate profits and tax cuts drove down fiscal revenue in the second half of
last year.

Last year, the economy grew 9 percent year-on-year,
ending a five-year period of double-digit growth.

Xie said earlier this month that the fiscal decline
might continue this year. The Finance Ministry has imposed tighter controls on
the general administrative expenditure of local governments.

For example, local governments have been ordered to
limit the year's spending on car purchases, meetings, catering and overseas
travel to no more than the amounts spent last year.

Jiangxi Province has urged officials to avoid
unnecessary travel and vowed to cut meeting outlays by 20 percent from the 2008
level, catering expenses by 10 percent, and international business travel costs
by 10 percent.

Many local governments, meanwhile, said they would
step up investment spending in 2008. Shaanxi Province, for example, said it
planned to invest 40 billion yuan in education, job re-training, public
sanitation and social security, up 21 percent from last year, while Henan
Province will invest 40 billion yuan to raise living standards.

These and other local governments announced
investment plans after the central government put together a 4-trillion-yuan
stimulus package in response to ebbing growth.

The domestic stock market is expected to rebound in 2009
after Waterloo-like condition last year. The benchmark Shanghai Composite Index
tumbled to around 2,000 points by December from its peak at 6,124 in 2007.Full story